Industrial production dropped 0.4% in October, an unexpected decline as superstorm Sandy knocked out power in the Northeast, and followed a revised 0.2% increase in September that was smaller than previously estimated. Capacity utilization decreased 0.4% to 77.8%, a rate 2.5 percentage points below its long-run (1972–2011) average. The Fed said the storm cut total production by almost 1 percentage point. Manufacturing, which makes up 75 percent of total production, slumped 0.9 percent last month, matching August as the biggest decrease since May 2009.

Foreign Buying of U.S. Assets Plunges on Europe Optimism International purchases of U.S. financial assets plunged 96 percent in September as confidence grew that Europe was beginning to solve its debt crisis and investors sold Treasuries following the Federal Reserve’s quantitative easing announcement.